UPDATE: Bank Of America Reiterates On Skullcandy On Better Revenue Outlook

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In a report published Thursday, Bank of America analyst Rafe Jadrosich reiterated an Underperform rating on
Skullcandy IncSKUL
, and raised the price target from $6.00 to $7.00. In the report, Bank of America noted, “While SKUL management has significantly improved its distribution strategy and product development, we believe the Skullcandy brand remains in transition it as repositions from an action sports brand to a broader lifestyle company. Importantly, google searches for ‘Skullcandy' indicate trends in 3Q and 4Q-to-date period decelerated sequentially from year-to-date 2014 trends. We expect gross margin % will remain under pressure (although gross profit $ could rise) given a mix shift toward lower margin product as SKUL adds more innovation (and cost) to its product while targeting a <$100 price point (management is guiding to slight GM compression for 2015).” Skullcandy closed on Wednesday at $8.89.
Posted In: Analyst ColorPrice TargetAnalyst RatingsBank of AmericaRafe Jadrosich
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